Surge reflects fastest pace of growth since the pandemic
Online retail sales showed a significant uptick in January, recording an 11.1% month-on-month increase after a revised drop of 3.3% in the previous month, NAB has reported.
The surge reflects the fastest pace of growth since the pandemic, with a 27.8% year-on-year increase in January, highlighting a recovery from a sluggish performance in 2023.
Growth was widespread across categories, with grocery and liquor sales leading the charge. Other sectors such as takeaway food, department stores, and media also surpassed the overall growth rate.
The latest NAB Online Retail Sales Index also showed that homewares and appliances – the largest sales category – kept pace, while fashion saw a more modest increase.
All Australian states experienced growth in online retail sales, with smaller states outperforming the national index. New South Wales and Victoria, which saw lesser contractions in December, reported slower growth in January compared to the national average.
Metropolitan and regional areas both saw significant rebounds, particularly in NSW and Western Australia, where metro growth outstripped the overall index. Year-on-year comparisons show metro areas leading over regional, especially in WA and NSW.
The report also noted growth for both domestic and international retailers, with domestic retailers slightly outperforming the overall index. On a year-on-year basis, domestic sales growth exceeded international, reversing a trend from 2023 when domestic growth had contracted.
According to NAB, Australians spent approximately $55.8 billion on online retail over the 12 months leading to January. This expenditure represents about 13.1% of the total retail trade, indicating a 5.0% increase from the previous year, based on data from the Australian Bureau of Statistics.
“In month-on-month, seasonally adjusted terms, growth rebounded in January from a significant drop in December,” said Alan Oster (pictured), chief economist at National Australia Bank. “The strong growth is partially down to seasonality. January was the first time in the series history where that month’s growth in original terms was positive.
“Conversely, the monthly growth contraction in original terms for December was the worst for that month’s series history. Hence, mild growth in January was boosted significantly by the seasonal estimates.
“In year-on-year terms, growth is clearly reflecting base effects of the drop in early 2023, which should moderate, all else being equal, in coming months. With growth in both the year-on-year and 12-months-to metrics beyond the broader retail trade series, the share of online sales as a proportion of broader sales increased again this month.”
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